I was recently interviewed by MFAA about the state of the property and lending market for first home buyers. Here’s an abridged version of the published article.

Falling Prices, Rising Rates: What First Home Buyers Need to Know Right Now

First home buyers are facing a genuinely mixed picture heading into the RBA’s next decision on 29 September.

On one hand, property prices have been easing. National home values have now fallen for five consecutive months, sitting around $34,000 below their March peak, and listings across the capital cities are up roughly a quarter on this time last year. For buyers who felt priced out earlier in the year, that shift alone could bring some previously out-of-reach properties back into range.

On the other hand, markets are pricing in a strong chance of another rate rise, potentially taking the cash rate from 4.35% to 4.60%. If that happens, a household with a $600,000 loan could see repayments rise by close to $100 a month, and lose around $13,000 of borrowing capacity in the process. That’s the tricky part about this market: the price might be right, but the numbers underneath can shift before you get there.

New research backs up just how unsettling this feels for buyers. Two in five prospective first home buyers say they don’t feel confident navigating the home loan market without professional help, and the same proportion are worried about both saving a deposit and keeping up with repayments once they’re in.

I saw this play out recently with a client, Garry, and his partner. We sat down early and set a clear, realistic budget together, based not just on where rates were, but on where they could move. Garry actually practised his future repayment by transferring that exact amount into savings each month before settlement, so there were no surprises once the loan began. If rates had already been higher when they were assessed, their borrowing capacity would have looked very different, potentially limiting them to a much smaller property.

This is exactly where a broker earns their place in the process. It’s not just about comparing rates, it’s modelling what happens under different rate scenarios, understanding lender policies around deposits and gifted funds, checking eligibility for government schemes, and helping clients prepare properly before they’re ready to buy.

It’s no surprise that brokers remain the most trusted source of support for people navigating this market, with almost six in ten prospective buyers naming a broker as their preferred source of guidance, ahead of financial advisers and banks. Brokers now facilitate a record 81.6% of all new home loans in Australia.

Whatever the RBA decides this month, the buyers who come out ahead will be the ones who understood their position before they made an offer, not after.

Link to full article: https://www.mfaa.com.au/news/falling-property-prices-and-borrowing-power-what-first-home-buyers-need-to-know